The Texas Water Development Board approved nearly $140 million in financing for municipal water and wastewater infrastructure projects during its Feb. 19, 2026 board meeting, advancing a slate of upgrades across communities in South Texas, Central Texas, and the Rio Grande Valley.
The funding package—about $139.6 million in total—combines low-interest loans and principal-forgiveness funding from the Drinking Water State Revolving Fund (DWSRF) and Clean Water State Revolving Fund (CWSRF) along with targeted state grants.
The projects focus heavily on rehabilitating treatment plants and replacing aging distribution lines, reflecting a broader challenge facing utilities across Texas: much of the state’s core water infrastructure was built in the mid-20th century and is now reaching the end of its design life. As systems age, utilities are increasingly turning to state financing programs to fund the expensive but essential work of renewing pipelines, pumps, and treatment facilities that communities rely on every day.
Largest projects funded
The largest single project approved in the February round went to the Austin, which received $59 million in Clean Water State Revolving Fund financing for wastewater system improvements.
The project will support upgrades to Austin’s wastewater infrastructure as the city continues expanding capacity to meet population growth and long-term regulatory requirements.
Several additional communities secured major funding packages:
- Pearsall — $16.1 million for wastewater system improvements through the Clean Water SRF
- Roma — $15.0 million for drinking water system improvements
- Bay City — $15 million grant authorized through a legislative appropriation
- Bonham — $14.4 million for water system improvements financed through the Water Loan Assistance Fund
Together, those five projects account for the majority of the funding approved during the meeting.
Distribution system upgrades and plant modernization
Several projects funded in the round focus on drinking water system reliability and distribution infrastructure renewal.
The city of Bonham will use its funding package to replace aging water mains and improve the reliability of the municipal distribution network. Similarly, the city of San Benito received $9.5 million in Drinking Water State Revolving Fund assistance to upgrade water system infrastructure in Cameron County.
The city of Alamo secured $9.27 million in financial assistance to modernize components of its drinking water system, including improvements to treatment and distribution facilities.
Across Texas, projects like these illustrate how utilities are prioritizing core system reliability investments, including pipeline replacement, system looping, and treatment upgrades.
Wastewater infrastructure upgrades
Wastewater system improvements also accounted for a significant share of the February funding round.
In addition to the Austin project, the city of Pearsall received $16.1 million to upgrade wastewater infrastructure and improve treatment performance. Meanwhile, the city of Cotulla secured $9.95 million in Clean Water State Revolving Fund assistance to support planning, design, and construction of wastewater system improvements.
Projects like these highlight the continued demand for financing to modernize wastewater treatment facilities across the state, particularly in smaller communities facing aging infrastructure and stricter regulatory requirements.
State infrastructure banks remain key financing pipeline
The February approvals underscore the importance of state infrastructure financing programs in helping utilities advance capital projects.
Programs administered by the Texas Water Development Board—including the Clean Water State Revolving Fund and Drinking Water State Revolving Fund—provide communities with low-interest financing and principal forgiveness, helping utilities manage large infrastructure investments while limiting ratepayer impacts.
Across the U.S., state revolving funds remain one of the largest sources of financing for municipal water infrastructure.
Additional funding approved
In addition to the municipal infrastructure projects totaling nearly $140 million, the board approved several smaller water-related funding requests during the meeting.
These included:
- $3.3 million grant to the South Plains Water Supply Corporation for water system improvements
- $3.0 million in principal forgiveness for a drinking water project addressing emerging contaminants at New Horizons Ranch and Center in Mills County
- $1.56 million in Flood Infrastructure Fund grants supporting watershed flood planning projects
- $39,387 flood planning grant for Chambers County
While smaller in scale, these projects support planning efforts and rural infrastructure upgrades that can lead to larger capital investments in the future.
What utilities should watch
For utilities across Texas, the February funding round highlights several key trends shaping water infrastructure investment:
- Distribution system replacement remains a top priority, particularly in smaller communities.
- Wastewater treatment plant upgrades continue to drive SRF financing demand.
- Principal forgiveness funding is increasingly used to keep projects affordable for ratepayers.
As communities across Texas confront aging infrastructure, population growth, and regulatory pressures, state financing programs like those administered by the Texas Water Development Board will continue to play a central role in helping utilities deliver critical infrastructure upgrades.
